Matthieu Bussière, Μ., Cheng, G., Chinn, D. M. & Lisack, N. (2015) “For a few dollars more: Reserves and growth in times of crises“, Journal of International Money and Finance, Vol. 52, Απρίλιος 2015, σελ. 127–145.
Highlights
- Countries with higher reserves saw a smaller growth shortfall in the great recession.
- Reserve to short-term debt is the most significant reserve adequacy ratio.
- Reserves’ marginal effect on growth is somewhat reinforced by capital controls.
- Instrumenting reserves qualitatively preserves the results.
Abstract
Based on a dataset of 112 emerging economies and developing countries, this paper addresses the question whether the accumulation of international reserves has effectively protected countries during the 2008–09 financial crisis. More specifically, the paper investigates the relation between international reserves and the existence of capital controls. We find that the level of reserves matters: countries with high reserves relative to short-term debt suffered less from the crisis, particularly when associated with a less open capital account. This suggests some degree of complementarity between reserve accumulation and capital controls.
Keywords
- Foreign reserves;
- Capital controls;
- Financial crises;
- Economic growth
Σχετικές αναρτήσεις:
- Niepelt, D. (2015) “Reserves for everyone – towards a new monetary regime?“, VoxEU Organisation, 21 Ιανουαρίου.
- Austin, Κ. (2014) “Systemic equilibrium in a Bretton Woods II-type international monetary system: the special roles of reserve issuers and reserve accumulators“, Journal of Post Keynesian Economics, 2014, vol. 36, issue 4, pages 607-634.
- Aziz, J. (2014) “Is It Time To End Fractional Reserve Banking?“, Pieria Network, 12 Μαΐου.